After Bump, Economic Confidence Rebounds in Canada

Despite optimism, people remain concerned about unemployment and the safety of investments and savings.

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Following a dip in optimism last month, the proportion of Canadians who describe the national economy positively has grown in July, a new Angus Reid Public Opinion poll has found.

In the online survey of a representative national sample of 1,012 Canadian adults, 59 per cent of respondents rate the country’s economic conditions as good (57%) or very good (2%), an eight-point increase since June.

This marks the highest point in optimism in the Angus Reid Public Opinion Economic Panorama since September 2008.

More Canadians are also describing their personal finances as good (62%, +6). Meanwhile, over a third of respondents (36%) remain worried about their personal situation.

The economy appears to be stable (55%) or en route to recovery (25%) for most Canadians. Only 14 per cent of respondents think the situation could worsen over the next six months.

Optimism notwithstanding, only 20 per cent of respondents think the Canadian economy is already out of recession.

Current Concerns

Many Canadians report having felt anxious in the past three months over the safety of their investments (38%), the threat of unemployment hitting their household (36%), and the safety of their savings (34%). These indicators have remained relatively stable over the past six months.

Other concerns include being able to meet mortgage or rent payments (26%), and employers running into serious financial trouble (21%).

Inflation and Debt

With summer in full force, the proportion of Canadians expecting higher gasoline prices has spiked from an already high 79 per cent last month to 85 per cent in July. Most respondents also think a week’s worth of groceries will cost more (76%), and the same goes for many Canadians regarding real estate (47%). Fewer people think new cars (38%) or TVs (26%) will get more expensive over the next six months.

If given extra cash, Canadians remain committed to paying down debt first and foremost. On average, an extra $1,000 would be allocated primarily to paying debt ($393), followed by covering daily expenses ($199), savings ($174), buying personal gifts or treats ($98), buying big items like a car or a home renovation ($70), investing in mutual funds ($39), and investing in individual stocks ($33).

The last three items—big purchases, mutual funds, and stocks—have registered a drop since June.

Political Leadership

Canadians are still sceptical of the political leadership on the national economy. Only about a third of respondents (35%) express confidence in Prime Minister Stephen Harper to make the right economic decisions, and just a quarter (25%) trust Liberal and Opposition Leader Michael Ignatieff to handle this file.

Bank of Canada Governor Mark Carney is still the most trusted personality with 50 per cent.

The Conservative Party is still preferred over the Liberals to rein in the national debt (34% to 27%), end the recession (33% to 23%), and control inflation (36% to 24%). The Liberals manage to beat the Tories by a meagre one point on creating jobs (31% to 30%). Around four-in-ten Canadians consistently say that none of these two parties is a better option to handle the economy.

Canada vs. Other Countries

Overall, Canadians think the national economy is in better shape than many other industrialized economies. Many respondents say the situation in the country is better than in the United States (78%), the United Kingdom (53%), France (47%), Germany (39%), Japan (37%), and Australia (24%). The only exception is still China, with 28 per cent of respondents saying Canada’s situation is worse.

Full Report, Detailed Tables and Methodology (PDF)

Methodology: From July 22 to July 23, 2010, Angus Reid Public Opinion conducted an online survey among 1,012 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 3.1%. The results have been statistically weighted according to the most current education, age, gender and region Census data to ensure samples representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

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